Category Archives: Fossil Fuels

According to a new study by Black & Veatch, coal’s share of the United States’ electricity market will drop dramatically over the next two decades as reliance on natural gas expands and new pollution controls for coal plants come into effect. The firm projects that “coal-fired power plants will provide 25 percent of the nation’s electricity in 2035, down from 49 percent today. Natural gas-powered facilities’ share of electricity generation will rise to 40 percent, up from 21 percent. Renewable energy production will spike from four percent to 11 percent while nuclear generation increases slightly from 20 percent to 21 percent in 2035.”

Lilke many models, Black and Veatch assume that federal legislation will pass that would impose caps on carbon emissions and increase the price for coal-based power generation.

Black & Veatch predicts that about 16 percent of the U.S.’ coal-fired fleet will be retired in the coming years to avoid the cost of complying with new pollution control measures.

In 2007, Kansas Environmental Chief Roderick Bremby drew the attention of the nation as the first state regulator to use greenhouse gas emissions as a reason to reject an air quality permit to build the proposed Sunflower coal plant in western Kansas. He declared carbon dioxide emissions from the proposed plant would be a public and environmental health risk and noted the risks of global warming. The Legislature later changed the laws, allowing the coal plant to proceed.

After Bremby denied the permits, Sunflower launched a legal and legislative battle. The state legislature voted to allow the new plants, and Governor Sebelius – who has since become Obama’s U.S. Secretary of Health and Human Services – vetoed the bill three times.

On Nov 2nd, as midterm elections dominated the news, Kansas’ newest Governor, Mark Parkinson, fired Bremby. And Sunflower Electric Power Corporation is back again with a deadline looming. In January of 2011, new federal rules on greenhouse gas emissions begin to take effect. If Sunflower receives a state air-quality permit before that date, its propsed plant will be grandfathered under the current standards.

“It was a midnight execution,” says NRDC senior advocate Theo Spencer. “When everybody’s eyes were on the election, the governor fires the guy who was responsible for protecting public health and the environment so he can ram this power plant through against public opinion.”

Scott Allegrucci, director of the Great Plains Alliance for Clean Energy (GPACE), says “there isn’t anyone in the state who doesn’t know what this was about.” He’s certain Bremby was removed to clear the way for someone willing to expedite the air permit for Sunflower’s proposed 895-megawatt coal plant in western Kansas and allow it to avoid the looming EPA rules.

With growing foreign demand, diminishing “economically-feasible” coal reserves, and rising mining costs, since October of 2009, the price for a one- month contract for Wyoming’s Powder River Basin coal, a main Colorado supplier, has risen 67 percent to $13.80 a ton. Powder River Basin coal has historically been priced at $5 a ton.

With almost 60 percent of Colorado’s electricity generated from coal-fired power plants, the increasing cost of coal will likely continue to be reflected in rate-payers electricity bills. Xcel Energy, for instance, has had three rate increases in the last 4 years in part to pay for construction of the utilities’ newest coal-fired power plant, Unit III, in Pueblo, CO.

And current electricity prices don’t take into account the impact of possible legislation to curb emissions of carbon dioxide at the federal and state level. “Legislation that’s now stalled in Congress could have placed up to a $17 charge on a ton of carbon emissions. Burning a ton of coal creates about 2.8 tons of carbon dioxide.”

The effort of Duke Energy to build an Integrated Gasification and Combined Cycle (IGCC) coal plant in Edwardsport, Indiana – or “clean coal” plant – has met with large cost over runs and considerable scandal in the Indiana Utility Regulatory Commission.

In April of 2010, Duke Energy announced that the project’s scale and complexity would add approximately $530 million to the previously approved $2.35 billion estimate. That brought the total estimated cost of the plant to $2.88 billion. The Indiana Utility Regulatory Commission (IURC) capped the costs of the Edwardsport coal gasification project that are passed on to consumers at $2.975 billion. Its construction costs are nearly double the original 2007 estimate.

With approval from the Indiana Utility Regulatory Commission (IURC), customer rates are expected to rise between 14-16% annually. The rate increase will not come at once; costs began phasing into rates in January 2009, and gradually will be added to bills through 2013.

But significant controversy surrounds the IURC and it’s decision to appove the much-increased costs of the IGCC coal plant: Scott Storms, an IURC attorney and administrative law judge, allegedly discussed employment with Duke while presiding over hearings concerning the utility. Storms left the IURC in September for a new position in Duke’s regulatory division. Storms had handled matters related to the coal-gasification plant and consumer watchdogs from the Citizens Action Coalition say “(The IURC) has essentially given Duke Energy a blank check. We question all of those orders and the motivation behind them.” Storm has been placed on administrative leave with pay.

The current issue of the scientific journal Energy contains “A global coal production forecast with multi-Hubbert cycle analysis,” by Tad Patzek and Gregory Croft which discusses the latest research on coal reserves. Based on scientific modeling, global coal production is expected to peak in 2011, which does not mean that coal will run out, but that economically-feasible, easily reached coal will run out. Carbon dioxide emissions related to coal burning are also expected to peak in 2011 and decline as production of coal declines.

Key findings from the study include:

1. Global coal production is likely to peak in the year
2011
2. The global CO2 emissions from coal will also peak in 2011,
3. The estimated CO2 emissions from global coal production will
decrease by 50% by the year 2050
4. Between the years 2011 and 2050, the average rate of decline of
CO2 emissions from the peak is 2% per year, and this decline
increases to 4% per year thereafter
5. It may make sense to have carbon capture and sequestration
(CCS) to alleviate the highest CO2 emissions between now and
the year 2020 or so.